Accumulated fragments: Getting rich on the rush

UAA-hmc-0461-series15-1-9 Tourists look at the aerial tramway used to transport copper ore between the mines and the mining operation at Kennecott Copper Mine in Kennicott, Alaska. From caption: "This tramway, located at the back of the mine building, extends way back into the recesses of the snow capped peaks in the background, and was used to transport ore from the four mines which were about four miles from the building. Heavy iron buckets, each one holding 800 lbs. of ore, were brought down from the mines by way of the huge cables which you see in the picture." In 1953, Cordova Airlines started a regular series of aerial tours from Anchorage to the old mining town of Kennicott, Alaska and the nearby ghost town of McCarthy. This photo is from the first tour.

A confluence of events and circumstances, from overbuilt railroads and bankruptcy of the Philadelphia and Reading railroads, low prices for cotton and wheat, high prices of silver, inflation and financial panic at home and abroad, put the U.S. in a depression in 1896.

Fortunes had been lost, unemployment was devastating, and the outlook was grim. Then, headlines in the papers screamed “GOLD!” and the Klondike gold rush was on. One paper wrote, “Just north of Seattle in the Klondike River, the gravel is loaded with gold. All you need is a pan to separate river gravel from real gold nuggets…”.

More than 100,000 gold-crazed men and women swept across the country to ship out of Seattle to Skagway via Juneau, though many died before reaching the Klondike. The trails from Skagway or Dyea were extremely torturous and both towns were run by a mean criminal element. Before these gold miners would get to the Klondike they would travel hundreds of miles through some of the most rugged terrain imaginable, leaving the bodies of thousands of horses along the way.

So it was that a 38-year-old Clarence L. Warner quit his job as a grader at the Mersereau Sawmill in Portville, N.Y. and headed west.

Alaska’s Klondike turned out to be much farther than expected. In Seattle, after using funds to outfit for prospecting and buying a steamship ticket, he headed north. In the end, he found that the Klondike was in Canada and, in order to cross the Alaska/Canadian boarder, by Canadian law, he had to carry at least 2,000 pounds of supplies with him. So, by 1897 and after trekking to the Klondike, he had found no gold and very little money to carry on. Warner was sick and disillusioned, necessitating his return to Seattle and hospitalization.

During his recovery, he met and married his nurse, Nettie Buckmaster, a widow. Buckmaster knew that the gold fever had not left Warner so she encouraged his return but, she believed, with better planning. Warner had found a partner named “Tarantula Jack” Smith and the two of them decided to take a more direct route via the ice-free but stormy Gulf of Alaska via the settlement of Valdez. Their intention was to take a river and mountain trail directly to the Dawson mining area.

During the summer of 1900, after leaving Valdez and on their way to Dawson, they encountered a native Athabascan tribe called the Ahtna. The tribe was using implements made from almost pure copper that was said to come from a secret mountain. The two decided to do a bit of prospecting before they left the area. In late July or early August, while taking a lunch break on the banks of National Creek next to the Kennecott Glacier, they noticed a large green patch that looked like grass on a ridge about 4,000 feet up. After some discussion, in which they decided not to investigate, they discovered some large pieces of copper ore in the creek that changed their minds.

In spite of a sprained ankle that Warner had, the two scrambled up the slope to the green patch that, to their amazement, was an enormous outcropping of chalcocite, an immensely rich copper ore. They decided to name their discovery the “Bonanza,” which would later become the cornerstone of the Kennecott.

The claim quickly became the talk of the mining world. The deposit was unique not in the quantity of ore, but in the quality. Copper mines in Utah and Arizona had ore concentrations of 2 percent; the Bonanza ore was assayed at up to 70 percent. Although the property had great potential, neither Warner nor Smith had the capital needed to develop the mine. The world’s richest copper ore was worthless without some way of getting it off the mountaintop. By mid August they and nine other partners had staked much of the ground that would become known as the Kennecott mines. A young mining engineer, Stephen Birch, who was in the area and with Smith and Warner’s help, acquired options on the claims. Birch was backed by Henry O. Havemeyer, a New York investor. The four of them formed the Alaska Copper and Coal Company which was promptly sued by others claiming ownership of the rich deposit. For the next four years the suits dragged on through the Territorial and Federal courts. Finally, the Supreme Court refused to hear the case and the Alaska Copper and Coal Company won ownership.

Meanwhile, in 1905, Warner and Smith had gone to New York with Warner’s wife to look for more investors. The men prepared a carefully selected list of potential financiers and, with the help of Warner’s wife, entertained lavishly at the Waldorf-Astoria. They ultimately attracted the attention of the Guggenheim family, who owned the American Smelting and Refining Company smelter monopoly, and J.P. Morgan, financier, and banker; together they reorganized the Alaska Copper and Coal Company into what became the Kennecott Mines Company.

A syndicate was formed called the “Alaska Syndicate” to fund the mine’s development. Over the next six years the syndicate spent $25 million to build mine- and millworks, a 196-mile railroad and organize a steamship line connecting the copper port of Cordova with ASARCO’s Tacoma smelter. All this occurred prior to the first shipment of copper.

On April 8, 1911, the first trainload of copper, worth $250,000 was shipped from Kennecott in 32 railroad cars. By 1916 production had reached 108,372,783 pounds of copper worth $28,042,396. Kennecott was classed among the nation’s largest mines.

Smith, Warner and Buckmaster lived royally in New York, staying in swank hotels. However, Smith, the not-so-trustworthy partner, had failed to maintain the business records that reflected Warner’s true share of the partnership. As a result, a substantial amount of Warner’s assets was lost. Warner and Buckmaster, still well off, moved into retirement in California where relatives resided.

In the spring of 1915, the Guggenheim and Morgan interests formed the Kennecott Copper Corporation. Birch became the first president and saw to the transfer of the Alaska Syndicate holdings — the Kennecott Mines Company, the Copper River and Northwestern Railway, the Alaska Steamship Company and the Beatson Copper Company, all in Alaska — into a new corporation. The phenomenal profits from the Alaska mine provided the capital to fund Kennecott’s purchase of the Bingham Canyon Mine in Utah and other low-grade mines in Nevada, Arizona and New Mexico. By the 1930s, while the deposit in Alaska was nearing exhaustion, the corporation had expanded to become the nation’s largest copper company and an international force in the metals market.

Warner died in 1935 at the age of 79; his wife lived until 1965, when she died at 92. I was unable to find any further information concerning “Tarantula Jack” Smith. The Kennecott deposit, though rich, proved limited in extent. The operation closed in 1938, having produced an estimated $200 to $300 million worth of copper in 28 years. That is more than $2 billion in today’s dollars. The company vacated the camp and donated its railroad to the territory.